Critical illness cover - is it worth it?

KatieXZoe

Hi, I am a FTB just bought my first house with my partner. 

We are both 27 years old, otherwise healthy, healthy BMI and non smokers. 

My partner is a teacher, I am a vet. I have income protection and my partner is looking at having income protection for his job. 

We are in the process of taking out cover for our mortgage which is fairly substantial as FTB with today's house prices. 

Initially we were just going to have life cover and then use our income protection should either of us not be able to work due to illness. 

We informed our mortgage broker of this and he has come back and strongly advised we look at whether we can afford critical illness cover. With just life and income protection we are paying approx £80 per month, however if we include critical illness (in addition to life cover, (whichever comes first) we are looking at nearly £200 per month which for us as new buyers is a lot of money. 

My thinking was if people do recommend it we get it maybe when we are slightly older and can afford it? The other part of me feels that the income protection is sufficient with life cover. 

So do people have life and critical illness? Is it worth it? 

cymruchris

KatieXZoe said:

Hi, I am a FTB just bought my first house with my partner. 

We are both 27 years old, otherwise healthy, healthy BMI and non smokers. 

My partner is a teacher, I am a vet. I have income protection and my partner is looking at having income protection for his job. 

We are in the process of taking out cover for our mortgage which is fairly substantial as FTB with today's house prices. 

Initially we were just going to have life cover and then use our income protection should either of us not be able to work due to illness. 

We informed our mortgage broker of this and he has come back and strongly advised we look at whether we can afford critical illness cover. With just life and income protection we are paying approx £80 per month, however if we include critical illness (in addition to life cover, (whichever comes first) we are looking at nearly £200 per month which for us as new buyers is a lot of money. 

My thinking was if people do recommend it we get it maybe when we are slightly older and can afford it? The other part of me feels that the income protection is sufficient with life cover. 

So do people have life and critical illness? Is it worth it? 

It depends on how you class 'worth it'.

Insurance is all about risk.

You could pay for no insurance on anything - and nothing ever happens - and so you've saved yourself a shed load of money.

Or the same but one of you loses a job, one has a terminal illness, and the dog needs £10k of vets bills paying - then you lose everything.

You've got to consider the balance of risk in the lottery of life.

If you don't have it and something happens - what would you say to yourself?

If you did have it and nothing happened - what would you say to yourself?

Of course there may be products out there that offer more competitive cover than one provided by a mortgage broker that may cost less but offer slightly lower cover - that might be worth exploring if you''re on the fence over it.

ACG

My personal view (not professional) is that Income Protection should be priority 1, life insurance priority 2. 
Critical Illness is more of a luxury. 

However there is another view in that if you were to have a stroke for example yes income protection will pay out. But that covers your loss of income in order to pay your bills. You are still costing money by being around and you may even need alterations to your home, specialist care or equipment... A lump sum of money would help with those things. 

I dont do a lot of CI cover because its out of most peoples budgets. But I think a level term policy for say £50-100k is far better than a £200k decreasing policy as you are more likely to claim later in life. So really you want a larger balance at the back end of the policy. 

If you like the idea of CI but not the cost, speak to the broker about different options and give them a budget to work to. Its not a case of all or nothing. 

Im not sure if that helps or creates more confusion - sorry. 

DullGreyGuy

First of all... what type of income protection do you have? Is it a benefit from your employer or your own policy? If it's your own policy then what its real name, ASU/PPI or PHI?

If you currently have PPI then I'd personally look to changing that to PHI long before looking to spend on CI

Also, make sure your broker is a whole market advisory service for protection insurance... some that are whole market mortgage brokers are not whole market insurance brokers.

dunstonh

Critical illness cover - is it worth it?

Anyone who has claimed will say yes.
Anyone that paid for the policy term and never claimed may say no.

We informed our mortgage broker of this and he has come back and strongly advised we look at whether we can afford critical illness cover. With just life and income protection we are paying approx £80 per month, however if we include critical illness (in addition to life cover, (whichever comes first) we are looking at nearly £200 per month which for us as new buyers is a lot of money. 

Statistically, you are more likely to claim on CIC than you are life assurance.   Hence the cost difference.

Income protection (PHI version, not PPI version) is more important in the pecking order if you do need to restrict to budget.   

Make sure you mortgage broker is whole of market for insurance. Many estate agent based ones are only whole of market for mortgages but tied to a single insurer for insurances.    That is the most expensive way to buy.

housebuyer143

Like with any insurance, it's worth it if you use it. If you don't, you will probably deem it a waste and if you do, you will say it was worth every penny. 

I have private healthcare. I haven't had to use it yet but it does give me piece of mind to know I can access faster healthcare if needed. 
If it gives you peace of mind then it's probably worth buying CIC. 

IAMIAM

Buy It

I have CIC with Life and PHI IP. Both bought before age 30 fixed to age 70. Both premiums are now doubled if I request a quote with my new age and health risks and parental bereavements. 

Worth it. £750 a year for all three. Wont ever cancel Don't think twice, fix a price now, buy it and then forget it about it. 

Newbie_John

So many other factors to consider..
How much savings do you have?
What would you do if one of you got critically ill / died / or one/both of you lost income at the same time?

If you have enough savings to cover 6 months period and you sure you'd be able to get a job within that time, if one of you is able to pay all the bills etc. when the other one reamains unemployed, if you'd consider downgrading to cheaper property if something happens to the other person.. then none of this insurances are really needed.

That's my thinking, but there's no one solution that suits all.

Spendless

Me and my husband both had critical life insurance when we bought our first properties separately in the mid 90s. Mine we never claimed on, husband was diagnosed with Cancer (successfully treated) and it paid out in full.   That's the complete chance you take that can't be predicted

tacpot12

Spendless said:

Me and my husband both had critical life insurance when we bought our first properties separately in the mid 90s. Mine we never claimed on, husband was diagnosed with Cancer (successfully treated) and it paid out in full.   That's the complete chance you take that can't be predicted

I'm curious as to whether the money made any sort of difference? 

Just_A_Dad

I got fleeced like this 20 years ago - on our FTB house - 'broker pushing the Critical illness cover' stipulating that we had to have it for the mortgage to be approved - although at the time didn't know it was being pushed - and a large chunk of that monthly premium being the brokers 'payment'/'pension' fund... my advise don't do it - or at least shop around and get an independant quote not from your broker..